Chapter 2. Income Tax

Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Work Location (Rescinded October 30, 2023). . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 12 CSR 10-2.020 Difference in Basis on December 31, 1972 (Rescinded July 30, 2018). . . . . . . . . 13 12 CSR 10-2.025 Adjustment to Avoid Double Taxation (Rescinded July 30, 2018…

generally deduct an additional one thousand four hundred (Rescinded July 30, 2018) dollars ($1,400) pursuant to section 143.161.2, RSMo. This additional deduction for a taxpayer who qualifies as an AUTHORITY: section 143.961, RSMo 1986. Regulation 1.121-3(b) unmarried head of hou…

(Rescinded July 30, 2018) of a fiscal year ending September 30. He changes to a calendar year basis and files a federal income tax return for the short AUTHORITY: section 143.961, RSMo 1986. Regulation 1.121-3(c) taxable period October 1 to December 31. He qualifies as a was orig…

and Personal and Dependency Exemption Deductions. . . . . . . . . . . . . . . . . . . 13 12 CSR 10-2.035 Conformity of Missouri With Federal Accounting Methods . . . . . . . . . . . . . . . 14

Accounting Methods more than the actual cost of reproduction. This note applies only to the reference material. The entire text of the rule is printed here. PURPOSE: The rule provides that a taxpayer must employ the same method of accounting for Missouri income tax purposes as (1…

(Rescinded October 30, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 12 CSR 10-2.045 Missouri Consolidated Income Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 12 CSR 10-2.050 Elective Division of Income . . …

2024. Note that Missouri’s income tax law contains no statute directly corresponding to 26 U.S.C. section 15. PURPOSE: This rule sets forth the requirements for the filing of Missouri consolidated income tax returns by affiliated groups or AUTHORITY: sections 143.271 and 143.961,…

(Rescinded February 29, 2024) 12 CSR 10-2.067 Failure to Pay Estimated Tax for Tax Years Ending After December 31, 1989 AUTHORITY: section 143.961, RSMo 2000, and section 143.451.2(3), RSMo Supp. 2013. Original rule filed Sept. 18, 2013, effective March PURPOSE: This rule clarifi…

(Rescinded May 30, 2004) (1) Applicability and Scope of Rule. This rule is applicable only AUTHORITY: section 143.961, RSMo 1986. Regulation 1.741 was with respect to taxable years ending after December 31, 1989, originally filed Dec. 22, 1975, effective Jan. 2, 1976. Amended: Fi…

December 31, 1989. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Denny Hoskins (3/31/26) CODE OF STATE REGULATIONS 1 Secretary of State 12 CSR 10-2.070 Interest on Overpayments. . . . . . . . . . . . . . . . . . . . . . . .…

will constitute integral parts of, a trade or business. PURPOSE: This rule represents the methods to be used in allocating and apportioning income to Missouri under that part of Chapter (5) Business and Nonbusiness Income—Ap­ plication 32, RSMo which is commonly known as the Mult…

(65) Single Trade or Business. The determination of whether the on or After January 1, 2020) activities of the taxpayer constitute a single trade or business or more than one (1) trade or business will be established by PURPOSE: This rule interprets sections 143.431 and 143.455, …

under Chapter 1 of the Internal Revenue Code (IRC) for the same PURPOSE: The director of revenue has the responsibility of taxable year for which the Missouri return is being filed after administering the Missouri income tax laws and, in that capacity, reduction for all credits o…

(Rescinded April 30, 2022) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 12 CSR 10-2.105 Report of Changes in Federal Income Tax Return. . . . . . . . . . . . . . . . . . . . . . . . 42

explaining all changes affecting the original return filed. Return In addition, a copy of the Summary of the Federal Revenue PURPOSE: Under the State Income Tax Law (section 143.011, Agent’s Report (commonly referred to as an RAR) using Form RSMo), this rule establishes the prope…

(Rescinded December 26, 1985). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 12 CSR 10-2.115 Enterprise Zone Credit and Exemption (Rescinded July 30, 1994). . . . . . . . . . . 43

(Rescinded July 30, 1994) Between Spouses (Rescinded March 30, 2024) AUTHORITY: section 135.250, RSMo 1986. Original rule filed Jan. 15, 1985, effective June 13, 1985. Rescinded: Filed Feb. 4, 1994, AUTHORITY sections 143.031, 143.111, and 143.181, RSMo 1994. effective July 30, 1…

(Rescinded July 30, 2018). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 12 CSR 10-2.125 Cultural Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

return will be mailed a notice stating that fact. The notice will PURPOSES: This rule establishes the requirements and procedures be sent, by regular mail, to the address on the return or the best for claiming the deduction provided in section 143.141, RSMo address available. The…

(Rescinded March 30, 2024). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 12 CSR 10-2.135 Frivolous Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 12 CSR 10-2.140 Partners…

Repurchase Agreements and New Communities Debentures PURPOSE: This rule explains the circumstances under which a are not tax-exempt. partnership return shall be filed and the general contents of that return. (3) The identification of obligations by this regulation is not necessar…

Carryback (Rescinded October 30, 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 12 CSR 10-2.150 Tax Exempt Status of United States Government-Related Obligations . . . . . . 44 12 CSR 10-2.155 Regulated Investment Companies . . . . . . . . . . . . . . . .…

Government-Related Obligations by the shareholder as a state income tax exempt-interest div- idend, less the amounts described in subsections (2)(A) and PURPOSE: This rule notifies the public of the exempt or nonexempt (B). A state income tax exempt-interest dividend means any st…

Composite Returns, and Nonresident Partner/Shareholder Income Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 2 CODE OF STATE REGULATIONS Denny Hoskins (3/31/26) Secretary of State 12 CSR 10-2.195 Special …

(Rescinded May 30, 2006) shall be determined by a fraction, the denominator of which shall be the total number of duty days in the tax year of the AUTHORITY: section 135.339, RSMo 1994. Original rule filed Aug. 2, athlete (including the sum of days spent at training camps, all 19…

(Rescinded February 29, 2024) nonresident member of a professional athletic team serves in that capacity after the commencement of team activities AUTHORITY: sections 32.200 (Article VII) and 143.961, RSMo 1994. and begins with the first day s/he reports to the professional Origi…

(Rescinded February 29, 2024) (4) Other Income Defined. All other income earned in Missouri by nonresident members of professional athletic teams in any AUTHORITY: sections 32.200 (Article VII) and 143.961, RSMo 1994. other capacity shall be included in Missouri adjusted gross Or…

(Rescinded February 29, 2024) RSMo. (B) Nonresident members of professional athletic teams AUTHORITY: sections 32.200 (Article VII) and 143.961, RSMo 1994. may also be required to make declaration of estimated tax Original rule filed Jan. 18, 1989, effective May 11, 1989. Rescind…

Professional Athletic Teams *Original authority: 143.961, RSMo 1972. PURPOSE: This rule clarifies the taxation of income of nonresident members of professional athletic teams under existing Missouri statutes. 12 CSR 10-2.225 Withholding of Tax by Nonresident Professional Athletic…

Professional Entertainers Aug. 28, 1994, expired Dec. 25, 1994. Emergency rule filed Dec. 9, 1994, effective Dec. 26, 1994, expired April 24, 1995. Original rule PURPOSE: This rule establishes guidelines for withholding of filed Aug. 18, 1994, effective Feb. 26, 1995. Amended: Fi…

(Rescinded April 30, 2022) (A) The service is provided by a trade or business; (B) The service is available to the general public; AUTHORITY: sections 32.200 (Article VII) and 143.961, RSMo 1994. (C) The service is at least as timely and reliable on a regular Original rule filed …

(Rescinded May 30, 2004) person (e.g., employees, contractors/agents, and third parties); (F) The name of the PDS and the type of delivery service AUTHORITY: section 143.961, RSMo 1994. Original rule filed Sept. being used must always be clearly identified on each item 11, 1992, …

subsection to the contrary, this subsection is not intended to, PURPOSE: This rule interprets the income tax law as it applies to and shall not be read to, incorporate any federal regulation by the determination of timeliness. reference. (1) In general, it is the taxpayer’s respo…

Tax Refund Offsets Partners of Partnerships (Beginning on or After January 1, 2020) PURPOSE: This rule allows the department to enter into reciprocal agreements to offset income tax refunds for state debts and PURPOSE: This rule interprets and applies sections 143.421 and establi…

Corporations and Nonresident Partners of Partnerships (Beginning on or After January 1, 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

January 1, 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 12 CSR 10-2.436 SALT Parity Act Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 12 CSR 10-2.705 Filing Cor…

Power of Attorney (Form 2827 PTE) is filed as required above, PURPOSE: This rule explains how a partnership or an S corporation and is executed by someone with authority to do so on behalf may elect to become an affected business entity under section of the partnership or S corpo…

Tax Returns AUTHORITY: section 143.961, RSMo 2016.* Original rule filed Nov. 29, 1995, effective May 30, 1996. Amended: Filed Dec. 20, 2023, PURPOSE: This rule explains the proper treatment of net operating effective July 30, 2024. losses for purposes of Missouri individual incom…

(Rescinded February 29, 2024). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 12 CSR 10-2.725 Foster Parent Tax Deduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 12 CSR 10-2.730 Expenses Related t…

the Adoption Tax Credit Limit for 2024 is $10,050. The taxpayer PURPOSE: Section 135.327, RSMo, provides a tax credit for has applied for, and the department has approved, an Adoption nonrecurring adoption expenses incurred in the adoption of a Tax Credit for $10,050. The taxpaye…